The Legislature in the State of Florida has been very specific in how they worded the law on who is entitled to surplus. Here is the “legalese” version our attorney uses, and below it, our version that’s easier to interpret
2021 Florida Statutes
Title VI – Civil Practice and Procedure
Chapter 45 – Civil Procedure: General Provisions
45.032 – Disbursement of Surplus Funds After Judicial Sale.
There is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.
It is the intent of the Legislature to abrogate the common law rule that surplus proceeds in a foreclosure case are the property of the owner of the property on the date of the foreclosure sale.
Owner of record” means the person or persons who appear to be owners of the property that is the subject of the foreclosure proceeding on the date of the filing of the lis pendens. In determining an owner of record, a person need not perform a title search and examination but may rely on the plaintiff’s allegation of ownership in the complaint when determining the owner of record.
Subordinate lienholder” means the holder of a subordinate lien shown on the face of the pleadings as an encumbrance on the property. The lien held by the party filing the foreclosure lawsuit is not a subordinate lien. A subordinate lienholder includes, but is not limited to, a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien. However, the holder of a subordinate lien shall not be deemed a subordinate lienholder if the holder was paid in full from the proceeds of the sale.
Whoever owned the property on the date the lawsuit was filed is the party who can claim surplus funds. They can make that claim after any lienholders are paid what they are owed on the property. Other lienholders might be: second or third mortgages, city liens (unpaid water, electricity, trash, etc.), code enforcement violations (didn’t fix something the city asked you to), UCCs (people who have a secured asset they have loaned to you like solar power on the roof, or hot water heaters, etc.) During our case review, our expert specialist will walk you through all the details of your case and who may or may not claim surplus.
A lot of times, we see the investor or purchaser at auction try and make a claim for surplus funds. This happens a lot when the homeowner isn’t represented by us. If nobody files an objection to this claim, a lot of judges will grant it. As a result, money that actually belongs to you (the prior homeowner) instead gets wrongfully disbursed to the new buyer of the home at auction. We can and will fight this on your behalf!